According to an October 9 article in the Financial Times, the London-based company Anglo American decided it could not provide antiretroviral treatment to most of its employees in South Africa. Only about 14,000 senior staff will be eligible for the AIDS medicines. The company employs about 160,000 people in Africa, most of them in South Africa -- where about 21% of the employees have HIV.

"The saving you achieve can be substantial, but we really don't know how it will stack up," said one official. "We feel that the cost will be greater than the saving." The company said it would need funding from international donor agencies to distribute AIDS treatment further.

The National Union of Mineworkers (South Africa) called the policy "inherently racist and discriminatory, with beneficiaries of the scheme being, in the main, white workers and the black elite. The foot soldiers who generate wealth in the bowels of the earth are excluded."

South Africa: Glaxo Offers Voluntary License on AZT/3TC

On October 7 GlaxoSmithKline said it would grant a voluntary license to Aspen Pharmacare, South Africa's largest generic drug company, to manufacture and sell AZT and 3TC -- a move sought by activists as well as by Aspen. Apparently this license will only allow the drug to be sold to government and NGO (nonprofit) organizations in South Africa -- not in other African countries. Glaxo will charge a royalty of 30% of net sales, which will be donated to nonprofits fighting AIDS in the country.

The final price of the Aspen drugs is not known but is widely expected to be much higher than prices available from generic manufacturers in India; however, the agreement will avoid legal obstacles that have kept the Indian drugs out of the South Africa. (India has patent laws designed to encourage pharmaceutical manufacturers to compete in low-cost production methods -- a system which has worked very well in providing low-cost medicines for that country, but now may have to be ended because of the World Trade Organization treaty, which requires all countries to adopt a U.S./European patent system even for domestic drug production.)

Note: In a separate announcement on October 3, not related to AIDS, GlaxoSmithKline offered discounts averaging 30% for U.S. elderly persons with limited income and without prescription coverage. Those who qualify must be 65 or older, and with income no greater than 300% of the federal poverty level (which today means less than $26,000 for individuals and $35,000 for couples). Qualifying persons will receive a card which they will present at pharmacies. Other companies may be under pressure to match these discounts, since otherwise their products will now become more expensive than competing Glaxo products for the eligible patients.

Generic Company Charges Patent Abuse in South Africa

On or around October 7, a South African affiliate of Cipla, the Indian generic pharmaceutical company, filed legal action in South Africa, accusing GlaxoSmithKline and Boehringer Ingelheim, the maker of nevirapine, of abusing their patents to keep prices high.

The action, described by observers as "legally groundbreaking" and "a major move," could potentially open the door to South African sales of HIV medications at prices much lower than those which will result from the voluntary licensing agreement announced the same day.

Note: For a legal analysis arguing that South Africa is permitted under international trade rules to take "certain legal steps to ensure meaningful reductions in drug prices," see Tripping Over Patents: AIDS, Access to Treatment and the Manufacturing of Scarcity, by Jonathan Michael Berger, University of Toronto. It can be downloaded fromwww.tac.org.za/archive.htm (go to Research Papers).

Also on international patents (although perhaps not relevant to this South African case) note Patent Politics, by Michael H. Davis, Cleveland State University College of Law. Davis argues that the "ordinary practitioner" test of nonobviousness, which determines that some patents are granted and some are not, is inherently subjective, allowing patent laws to implement national industrial policy without democratic oversight -- and also making patent law not rationally transferable across national borders. The abstract and link to the full article are available through the Social Science Research Network, at:http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=230701

Comment: we find it good as far as it goes -- though it does not go very far.

South Africa: Major Conflict Over Death Report

A report by the Medical Research Council (South Africa's government medical-research institution, like the U.S. National Institutes of Health) found that AIDS had become the largest single cause of death in the country, and that 40% of the deaths last year of South Africans age 15-49 were AIDS related. The South African government under President Thabo Mbeki -- which has refused to provide antiretroviral treatment through the public health system, even for prevention of mother-to-infant transmission -- refused to release the report, which was leaked to the press.

The report also predicted that in 10 years AIDS in South Africa would cause more than double the deaths of all other causes combined, and that life expectancy in the country would drop from 54 years to 41.

On October 16, after extensive protests over its suppression, the report was released at:http://www.mrc.ac.za

On October 8 the British charity Voluntary Service Overseas released a survey showing that 87% of people who responded thought it was right for people with HIV in poor countries to pay less for the medicines than people in the UK, according to The Guardian, UK, October 8.

We do not know of a similar U.S. poll, but almost certainly a large majority here would agree.

For More Information

For more information on treatment access in Africa, see the Web site of the Treatment Action Campaign (TAC), the leading AIDS treatment activist group in South Africa, at http://www.tac.org.za/

Action Alert: Online Petition on Drug Patent Rules Open Until November 2

"14 million people in the developing world die every year from treatable diseases, including HIV/AIDS, malaria, and tuberculosis. The high cost of medicines is a key factor. World Trade Organization patent rules are pushing up the price of these medicines. I urge WTO members, in particular the United States, to demonstrate their commitment to put health before wealth by changing and clarifying the global patent rules at the forthcoming WTO summit conference."

Note: The reference to the WTO summit is to the Ministerial Conference of the World Trade Organization (WTO), which occurs every two years; the last meeting was in Seattle in 1999. The next meeting is scheduled for November 9-13 in Doha, Qatar, but might be moved to Singapore for security reasons.

Article:

Compulsory Licensing for Bridging the Gap--Treatment Access in Developing Countries: Interview with James Love, Consumer Project on Technology

Date:

03/05/99

Issue:

314

Author:

James, John S.

In Thailand today patients cannot get life-critical drugs--such as fluconazole to treat deadly fungal infections which are common there in persons with HIV (including cryptococcal meningitis, and P. marneffei which progresses rapidly and is almost 100% fatal without treatment)--or ddI, important for many antiretroviral combinations but no longer subsidized by the Thai government. Despite this health emergency, the U.S. government has used its great economic powers to pressure Thailand to change its patent and trade laws in ways that will maintain this deprivation and make these and other patented medications even less accessible in the future. Last September, 30 people from Thai AIDS and health organizations demonstrated at the U.S. embassy in Bangkok against this pressure on their country, and presented a petition for U.S. Trade Representative Charlene Barshefsky (see "NGOs Rally Against Patent Law Changes," Bangkok Post September 5, 1998, and other articles in this newspaper; they are available on the Web).1

Thai AIDS and health organizations learned that under Thailand's patent laws, and consistent with international laws and treaty obligations, fluconazole could be sold in Thailand on a nonprofit basis for about 4% of its current cost, which would mean that everybody who needed this drug could receive it. Many lives would be saved, and at no cost to the patent holder, which would receive a small royalty as opposed to receiving nothing when patients cannot buy the drug at all. But the proprietary pharmaceutical industry strongly opposes any such relief, fearing precedents which could lead to weakening of intellectual-property protection in more important markets--regardless of the specifics of each case, and regardless of the human costs of this abuse of U.S. state power. Until now, because so few people have understood the issue, only this industry has had significant input into the U.S. trade policies which make medicines many times more expensive in poor countries than they would otherwise be.

James Love of the Consumer Project on Technology--an organization started by Ralph Nader and based in Washington, D.C.--has proposed using "compulsory licensing" to help make modern pharmaceuticals available in poor countries. Compulsory licensing--already widely used in the United States itself and in most other countries, and allowed under certain conditions by GATT and other international trade agreements--means that a nation's government, for an important public purpose, can allow the domestic use of a patent or other intellectual property, under terms and conditions which that government sets. For example, Thailand could use compulsory licensing to allow Thai companies to buy bulk fluconazole, ddI, or other essential medications from generic pharmaceutical manufacturers, sell the drug for use in Thailand, and pay a royalty to the patent holder (usually between 1% and 10% of sales); to protect the patent holder, the specific arrangements would be subject to review by the World Trade Organization (WTO) in Geneva, if challenged by a member country. But instead of letting such a case go to the WTO--which could set precedents, and almost certainly would bring more visibility to this way of bridging the treatment gap in poor countries--the U.S. pressured Thailand to change its patent laws in ways that will outlaw this possibility for that country. (For technical background on compulsory licensing, see http://www.cptech.org/ip/health/cl.)

This issue is critically important because even a small group of citizens, focused on bringing balance to U.S. trade policy concerning intellectual-property protection of pharmaceuticals, could have enormous human impact throughout the world. A balanced policy would still protect intellectual property, in order to preserve incentives for corporate drug development. But it would ask that people in poor countries be required to contribute to profits only according to their ability to pay--instead of being written off and left to die without treatment (while contributing nothing at all to financing drug development, because they are asked to pay an impossible price which prohibits any sale). The alternative to policy reform is to make the great majority of the world's people wait up to 20 years (for patents to expire) for access to new treatments for AIDS, cancer, tuberculosis, and other diseases--a wait which is becoming increasingly serious due to the greatly accelerating pace of developments in biology and medicine.

This issue is new in that until only a few years ago, GATT and other international trade agreements did not cover pharmaceutical patents at all (see GATT and the Gap: How to Save Lives," AIDS Treatment News #307, November 20, 1998-- available at http://www.aids.org/atn). Until recently, no one much cared if poor countries made their own AZT or other drugs without permission of the patent holder. Today's GATT agreement does cover pharmaceutical patents, while allowing some flexibility that could be used to protect human health. But pharmaceutical-industry players now have a new focus available for their energies--protecting their intellectual-property rights as much as possible, in every situation, regardless of the human impact in developing countries--and so far they have been the only voice heard in U.S. policy. Lack of access to medication has long been a deadly problem, but only recently--triggered by the new GATT coverage of pharmaceutical patents--has the U.S. government imposed itself as a major, active obstacle to a workable solution.

Those who believe nothing can be done to change U.S. trade policy if pharmaceutical companies object should consider tobacco, also a powerful industry. A decade ago the U.S. used its economic might to force small countries like Thailand to allow U.S. tobacco companies to promote widespread smoking there. After protest from cancer organizations and others, U.S. trade policy on tobacco was significantly improved.

A movement to reform U.S. trade policy regarding pharmaceutical patents in developing countries would have several strategic advantages:

The moral issue is clear--corporate profits vs. human life, with people denied lifesaving medicines just so that precedents can be set or maintained;

Individuals affected can easily be found--allowing publicity to be much more effective;

Life-and-death impact on up to 90% of the world's population creates billions of potential allies, who can substantially contribute to the global effort by raising the visibility of what is happening in their communities;

The movement seeks an achievable goal of changing policies to enable people to improve their own conditions--instead of trying to provide drugs to most of the world through charity;

The manufacturing facilities, distribution channels, and laws and treaties required, are already in place;

Policy reform would not necessarily cost anything to U.S. government or industry;

Besides saving many lives, intellectual-property reform on pharmaceuticals could also end needless bad will and diplomatic disputes between the U.S. and India, South Africa, and many other countries--opening doors to alliances with persons and organizations interested primarily in foreign policy. Is it rational that a single industry totally dominate U.S. policy in this area, creating trade disputes with dozens of nations in its narrow pursuit of self-interest?

The problem will not go away; the system in place today will not correct itself in any foreseeable future. For the U.S. government, the choice will remain whether to cooperate with millions of people who are trying to save their lives, or continue fighting against them.

A strategic challenge is that, unlike with tobacco, the leadership of the U.S. medical community is heavily funded by the industry strongly opposed to reform. But the main reason a large movement did not develop earlier, we believe, is that few have understood this issue, which has medical, legal, economic, political, and diplomatic aspects. Until recently, almost no one working in AIDS knew what compulsory licensing is, let alone knew that laws and treaties allowing it are already in place. But several organizations and projects have recently begun working in this area, starting independently, often without even knowing about the others--a sign that the time is right for this issue to become more prominent.

A coalition of AIDS and health-care advocacy organizations is now forming to press for compulsory licensing and other approaches to broadening global access to AIDS treatments. For more information on this as-yet-unnamed effort, you can contact ACT UP/Philadelphia at 215-731-1844, or P.O. Box 22439 Land Title Station, Philadelphia PA 19110, or email Asia Russell, asia@critpath.org.

Here is a way of "bridging the gap" in treatment access that can actually work--not just for a few people but for millions throughout the world, for AIDS and other diseases alike.